EURUSD bulls need validation from 21-DMA to retake controls
EURUSD’s corrective pullback remains below 21-DMA, as well as a two-week-old ascending trend line, suggesting a further downside towards the lower end of the latest range between 1.1120 and 1.0900. However, the 23.6% Fibonacci retracement (Fibo.) of February-March downside acts as an intermediate halt around 1.0980. While the bearish MACD and downward sloping RSI favor the bears of late, the prices have little room on the downside before the RSI turns oversold. As a result, the 1.0900 support is likely acting as a trigger for fresh buying, if not then the quote’s south-run towards the monthly low near 1.0800 can’t be ruled out.
Meanwhile, the 21-DMA level surrounding 1.1035 guards the quote’s short-term rebound ahead of the previous support line from early March, near 1.1045-50 at the latest. In a case where the EURUSD prices rally beyond 1.1050, the upper end of the aforementioned trading range, close to 1.1120, will lure the bulls. It should be noted, however, that the pair’s successful break of 1.1120 will enable the buyers to challenge the 50-DMA level surrounding 1.1200.
Overall, EURUSD is likely to decline further but the south-run has a limited horizon to cover.
